‘Biggest deal ever’: Trump announces trade agreement with EU
US President Donald Trump has announced that the US and the European Union reached a framework for a trade deal, after talks with European Commission President Ursula von der Leyen in Turnberry, Scotland.
Trump announced a 15 per cent across-the-board levy on imports from the 27-nation European Union, ending a months-long saga with America’s largest trading partner as the EU sought to keep baseline tariffs at 10 per cent.
“We are agreeing that the tariff straight across for automobiles and everything else will be a straight-across tariff of 15 per cent,” Trump said.
European Commission President Ursula von der Leyen and US President Donald Trump have announced the framework for a trade agreement. (AP)
Speaking alongside von der Leyen, the president said the EU “is going to agree to purchase from the United States US$750 billion ($1.14 trillion) worth of energy. They are going to agree to invest into the United States US$600 billion ($915 billion) more than they’re investing already.”
“All of the countries will be opened up to trade with the United States at zero tariffs, and they’re agreeing to purchase a vast amount of military equipment,” Trump added.
Trump said the agreement with the European Union “is the biggest deal ever made.”
Trump began talks with von der Leyen earlier Sunday as Friday’s deadline had loomed to reach a trade deal to avoid 30 per cent tariffs on European imports. Trump had said the US could not go lower than a 15 per cent across-the-board tariff rate for the European Union.
Tariffs on EU imports will rise to 15 per cent. (AP)
Von der Leyen acknowledged negotiations with Trump were tough: “I knew it at the beginning, and it was indeed very tough. But we came to a good conclusion for both sides.”
“It was a very interesting negotiation. I think it’s going to be great for both parties,” Trump said. The agreement, he said, was “a good deal for everybody” and “a giant deal with lots of countries.”
Von der Leyen said the deal “will bring stability, it will bring predictability, that’s very important for our businesses on both sides of the Atlantic.”
Many facets will require more work
As with other, recent tariff agreements that Trump announced with countries including Japan and the United Kingdom, some major details remain pending in this one.
Von der Leyen said the 15 per cent tariffs were “across the board, all inclusive” and that “indeed, basically the European market is open.”
At a later news conference away from Turnberry, she said that the US$750 billion in additional US energy purchases was actually over the next three – and would help ease the dependance on natural gas from Russia among the bloc’s countries.
Trump said it was the “biggest deal ever”. (AP)
“When the European union and the United States work together as partners, the benefits are tangible,” Von der Leyen said, noting that the agreement “stabilised on a single, 15 per ccent tariff rate for the vast majority of EU exports” including cars, semiconductors and pharmaceuticals.
But von der Leyen also clarified that such a rate wouldn’t apply to everything, saying that both sides agreed on “zero for zero tariffs on a number of strategic products,” like all aircraft and component parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials.
It is unclear if alcohol will be included in that list.
“And we will keep working to add more products to this list,” she said, while also stressing that the “framework means the figures we have just explained to the public, but, of course, details have to be sorted out. And that will happen over the next weeks”.
Further EU approval needed
In the meantime, there will be work to do on other fronts. Von der Leyen had a mandate to negotiate because the European Commission handles trade for member countries. But the Commission should now present the deal to member states and EU lawmakers – who will ultimately decide whether or not to approve it.
Before their meeting began, Trump pledged to change what he characterised as “a very one-sided transaction, very unfair to the United States.”
“I think both sides want to see fairness,” the Republican president told reporters.
Von der Leyen said the US and EU combined have the world’s largest trade volume, encompassing hundreds of millions of people and trillions of dollars and added that Trump was “known as a tough negotiator and dealmaker.”
Von der Leyen said Trump was a “tough negotiator”. (AP)
“But fair,” Trump said.
Trump has spent months threatening most of the world with large tariffs in hopes of shrinking major US trade deficits with many key trading partners. More recently, he had hinted that any deal with the EU would have to “buy down” a tariff rate of 30 per cent that had been set to take effect.
But during his comments before the agreement was announced, the president was sked if he’d be willing to accept tariff rates lower than 15 per cent, and said “no.”
First golf, then trade talk
Their meeting came after Trump played golf for the second straight day at Turnberry, this time with a group that included sons Eric and Donald Jr. In addition to negotiating deals, Trump’s five-day visit to Scotland is built around golf and promoting properties bearing his name.
A small group of demonstrators at the course waved American flags and raised a sign criticising British Prime Minister Keir Starmer, who plans his own Turnberry meeting with Trump on Monday.
Other voices could be heard cheering and chanting “Trump! Trump!” as he played nearby.
Trump on his Turnberry golf course. (Getty)
On Tuesday, Trump will be in Aberdeen, in northeastern Scotland, where his family has another golf course and is opening a third next month. The president and his sons plan to help cut the ribbon on the new course.
The US and EU seemed close to a deal earlier this month, but Trump instead threatened the 30 per cent tariff rate. The deadline for the Trump administration to begin imposing tariffs has shifted in recent weeks but is now firm and coming Friday, the administration insists.
“No extensions, no more grace periods. August 1, the tariffs are set, they’ll go into place, Customs will start collecting the money and off we go,” U.S. Commerce Secretary Howard Lutnick told Fox News Sunday before the EU deal was announced.
The full list of Trump’s ‘reciprocal’ tariffs
He added, however, that even after that “people can still talk to President Trump. I mean, he’s always willing to listen.”
Without an agreement, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes.
If Trump eventually followed through on his threat of tariffs against Europe, meanwhile, it could have made everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals more expensive in the US.
“I think it’s great that we made a deal today, instead of playing games and maybe not making a deal at all,” Trump said.
